Cisco Systems Inc. demonstrated strong market resilience as its stock price stabilized around $64.50 on February 24, 2026, closing at $64.48. The increase of 0.78% on the day followed a series of favorable developments, including a record second-quarter fiscal 2026 revenue, robust demand for artificial intelligence (AI) infrastructure, and a recently announced 3% increase in dividends.
The stock traded within a range of $63.92 to $64.85, with approximately 18.4 million shares exchanged. Year-to-date, Cisco’s shares have appreciated by nearly 12%, positioning them close to the upper limit of their 52-week range, which spans from $44.50 to $65.20. The company’s market capitalization is approximately $260 billion, reflecting investor confidence in its strategic pivot towards high-growth sectors, particularly AI networking, security, and observability.
Cisco’s stability comes on the heels of its fiscal 2026 Q2 earnings report released on February 12, 2026, detailing a revenue of $14.0 billion. Although this figure represents a 6% decrease year-over-year, it surpassed analyst expectations of $13.7 billion. Adjusted earnings per share reached $0.96, exceeding consensus estimates of $0.92. Product orders surged by 11% year-over-year, primarily driven by increasing demand for AI-related networking solutions, while remaining performance obligations (RPO) hit a record $42.3 billion, climbing 18%.
CEO Chuck Robbins attributed this success to the acceleration of AI infrastructure deployments. Networking orders have seen a significant uptick due to investments from hyperscalers and enterprises in AI data centers. In addition, security revenue experienced an 8% growth, and observability products are gaining traction. Improved supply chain dynamics and a shift towards software and subscription models have resulted in an adjusted gross margin expansion to 68.4%.
On February 12, Cisco announced a 3% increase in its quarterly dividend to $0.41 per share, payable on April 23, 2026, to shareholders of record on April 2. This decision underscores the company’s strong cash generation capabilities and commitment to returning value to shareholders, with a current yield of around 2.5%. The company also repurchased $2.5 billion in stock during the quarter, showcasing its confidence in future growth.
Analysts maintain a predominantly optimistic outlook on Cisco. The consensus among approximately 25-30 firms recommends a rating of Moderate Buy to Buy, with average 12-month price targets ranging from $68 to $72, suggesting an upside of 5%-12% from current levels. Some firms, including Morgan Stanley and JPMorgan, forecast target prices as high as $80, citing tailwinds from AI and margin expansion.
Despite this positivity, some analysts express caution regarding declines in legacy product lines and increasing competition from companies like Arista Networks in high-speed switching for AI clusters. Cisco has projected third-quarter fiscal 2026 revenue between $13.6 billion and $13.8 billion, with adjusted EPS anticipated between $0.83 and $0.85, aligning with or slightly exceeding consensus expectations.
Management emphasized ongoing momentum in AI networking, resilience in security offerings, and progress towards achieving an annualized run rate target of $1 billion for observability products. Cisco’s substantial investments in AI include advancements through its Silicon One platform and collaborations with hyperscalers for next-generation data center fabrics. Recent announcements highlight expanded cooperation with NVIDIA on AI infrastructure, alongside the introduction of new observability tools designed for generative AI workloads.
While challenges persist in traditional enterprise networking, where some customers are delaying upgrades amid economic uncertainty, Cisco’s diverse portfolio—including networking, security, collaboration (Webex), and observability—provides a buffer against these headwinds. The transition towards software and recurring revenue streams is expected to bolster margins and predictability.
Looking ahead, Cisco’s next earnings report for the third quarter of fiscal 2026 is anticipated in mid-May 2026. Investors will closely monitor trends in AI orders, security growth, margin improvements, and updates on full-year guidance and strategic initiatives. As a foundational player in global networking, Cisco Systems has adeptly shifted towards AI-driven opportunities while maintaining robust cash flow and shareholder returns. With record RPO figures, dividend growth, and supportive AI trends, Cisco is well-positioned for sustained performance in 2026, despite challenges facing its legacy segments.
